Is Health Law A 'Breathtaking Assertion' Of Power?

I'm Michel Martin and this is TELL ME MORE from NPR News. Coming up, the life of legendary athlete Jim Thorpe was full of dramatic ups and downs, from Olympic triumph to all kinds of personal struggles. But the twist and turns of fate did not end with his death. We'll hear more about a fascinating controversy over his final resting place. We'll have that conversation in a few minutes.

But first, we're going to start with a topic you're going to be hearing a lot about over the couple of weeks. We're talking about the affordable care act, a landmark health reform to supporters, Obama-care to opponents. It's been almost two years since President Obama signed the act into law.

PRESIDENT BARACK OBAMA: And we have now just enshrined, as soon as I sign this bill, the core principle that everybody should have some basic security when it comes to their healthcare. And it is an extraordinary achievement that has happened because of all of you and all the advocates all across the country, so thank you.

MARTIN: Since then, the law has continued to be one of the most hotly debated issues on Capitol Hill and across the country. And next week, opponents will have their day in court, the Supreme Court. Justices will begin hearing arguments on Monday about whether major parts of the law should be thrown out. So, to help us understand this issue, we've decided to hear a variety of perspectives. Tomorrow, we will speak with Neal Katyal who defended the Obama administration as Acting Solicitor General.

He argued in favor of the healthcare law in lower courts, including the U.S. Court of Appeals for the 11th circuit. But today, we turn to Michael Cannon, the director of health policy studies at the Cato Institute. That is a libertarian think tank that opposes the law. He's been a frequent guest on our program to talk about health policy, and he joins us now. Welcome back. Thanks so much for joining us once again.

MICHAEL CANNON: Thank you for having me.

MARTIN: The Supreme Court challenge to the affordable care act comes from 26 states. The court has received more than 120 friend-of-the-court briefs. The Cato Institute filed four lengthy briefs opposing various parts of the law. So obviously, if you filed four briefs, you have (unintelligible) of a complex argument about this.

CANNON: We feel very strongly about it.

MARTIN: You feel very strongly about it, but could you just give us a kind of the major substance of the Cato Institute's opposition?

CANNON: Well, the law's been unpopular ever since it was enacted, and that's for two reasons, because it doesn't give people the sort of security that President Obama was talking about. It's thrown a lot of people out of their health plans and will continue to do so. But also because the law is illegal. Congress did not have the authority either to force Americans to purchase a private health insurance plan or to force states to expand their Medicaid programs.

Those are the two main challenges to the law that are before the Supreme Court, that they will be hearing arguments on next week.

MARTIN: So the crux of your argument is you don't believe that the government can force an individual to buy something, number one, and you don't believe a government can force the states to spend money on something in particular.

CANNON: Basically, yes. It's a little more precise than that because, in fact, the government has forced people to purchase a private product. Shortly after the Constitution was ratified, Congress passed the militia acts which forced able-bodied young men to purchase arms so that they could participate in the militia and Congress had that authority under the militia clause of the Constitution.

But Congress does not have a plenary authority to force Americans to purchase any private product that Congress chooses, and that is the power that the Obama administration and Congress asserted under this law. They claim that the commerce power of the Constitution, the power the Constitution gives Congress to regulate commerce among the states, gives them the power to force Americans to engage in commerce. And it clearly does not.

MARTIN: That was going to be next question, that the Obama administration has argued that the laws regulating interstate commerce in the Constitution do give it that authority. You just say, they're just wrong.

CANNON: It does not because the words regulate commerce among the states, which appear in the Constitution presumes that that commerce already exists. It does not give Congress the power to create commerce where none existed. And if the Supreme Court were to uphold this unprecedented and really breathtaking assertion of government power, there would be nothing to stop the Congress from forcing Americans to purchase any private product that Congress chose to favor.

That could be a gym membership. That could be stock in Exxon Mobil. That could be broccoli, if Congress decided that any of these products move in interstate commerce and that forcing you to buy it was essential to the regulatory scheme they wanted to enact.

MARTIN: Now, as we mentioned, your objection - your research organization's objections to the Obama administration's healthcare overhaul, are broad-based. But there are some people who believe, and actually many people believe, that the rest of the law could survive the court challenge even if the individual mandate fails. And they say the financing may be dealt a serious blow, but that the rest of the law, just as a structure, could survive. Would that be acceptable to you?

CANNON: I don't think so, and they are actually hearing arguments next week, about where should the Supreme Court if it does strike down the individual mandate. Should it strike down the rest of the law, or only parts of the law, or only the individual mandate itself? But what the courts generally try to do in cases like this, is they try to avoid a situation where they strike down parts of the law and leave intact a law that Congress never would have enacted on its own.

And I think that is the situation that confronts the court. If they strike down the individual mandate and stop there or if they strike down the individual mandate and other portions of the law that are intimately tied to it, in either case, they would be leaving in place a law that Congress would never have passed by itself. So you would, in effect, have the courts legislating. And the courts try to avoid doing that, so I think that what they really need to do is strike down the entire law because both the individual mandate and the Medicaid mandate, forcing states to expand their Medicaid programs, are unconstitutional.

MARTIN: We're talking with Michael Cannon. He is the director of health policy studies for the Cato Institute. That's a think tank that opposes the health care overhaul law. Legal challenges to the healthcare law are being heard by the Supreme Court next week. We're getting a variety of views about this. Tomorrow, we're going to speak with Neal Katyal who defended the Affordable Care Act in the case of the lower court.

He was the former Acting Solicitor General. Of course, I think a lot of people know Massachusetts has required people to have insurance since 2006, an individual mandate. Why is that acceptable or legal if you think the federal law is not? And what do you think the affect will be on the Massachusetts program if that law is struck down?

CANNON: I don't think the Massachusetts law is acceptable. I think it's increasing the cost of health insurance for residents of that state and taking away their freedom, as well. I'm also not sure that it's legal, but there is a difference between a state imposing an individual mandate and the federal government imposing an individual mandate. States, under our federalist system, have much broader powers than the federal government.

They have what lawyers call a general police power, which might allow a state to impose an individual mandate. The federal government does not have a general police power. It has specific powers that are enumerated in the Constitution, and the 9th and 10th Amendments to the Constitution state that if the power is not enumerated in the Constitution, then the federal government doesn't have it.

And the federal government cannot infringe on the rights of the people, even if those rights are not specifically mentioned in the Constitution. And the right not to purchase health insurance is one of those.

MARTIN: Now, we are focusing, here today, on Constitutional arguments in advance of the arguments before the Supreme Court next week. But just in the couple of minutes that we have left, I just wanted to talk more sort of broadly and philosophically about what your objections to this law have been all along. The Congressional Budget Office now estimates that the law will cost less than it originally thought, but it still projects the insurance provisions will cost more than $1 trillion over the next 10 years.

So I just wanted to ask, you know, more broadly, is your concern - the Constitutional arguments aside, is it the cost of this or is it that you think it won't work to address the very real issue of a large number of people in this country who are uninsured, who don't have consistent access to healthcare with all the health outcomes that I think people know pretty well? They go into emergency rooms for their care and all these other kinds of dysfunctional things that occur.

CANNON: Philosophically, libertarians argue that it is not a legitimate use of government power to force people to purchase health insurance or for the government to play any special role in health care. But practically, libertarians oppose that sort of governmental intervention in the economy, because even though the government is trying to plug holes and it's trying to keep people from falling through the cracks of the healthcare sector, for example, what it ends up doing is it ends up doing more harm than good and those cracks widen.

The mandate requiring employers to provide coverage to dependents up to the age of 26 has caused at least one union local to cancel its dependent coverage entirely, throwing 6,000 dependents out of their health insurance.

The preexisting condition provisions as applied to children's health insurance has absolutely destroyed the child-only health insurance markets in 17 states and is causing those markets to unravel in another 17 states.

The medical loss ratio provisions in this law, it has been estimated, will throw maybe 100,000 more people out of their health insurance plans and has already thrown nearly a million out of their health insurance plans by forcing Principle Financial Group out of the market. So this law is having the opposite of its intended effect.

MARTIN: And, as we said, we only have about a minute and a half left. So let's say that you get your wish and the health care law is overturned. Let's say you can wipe the slate clean. What's your better idea? What's your better idea for addressing, you know, the tens of millions of people who had lacked health insurance before, people who were engaging in kind of dysfunctional behavior in order to get their health care, dysfunctional, expensive behavior and so forth - what's your better idea?

CANNON: Well, the most important thing we can do for those people who have a hard time affording health care right now is get all those people who do have health insurance to start spending their own money instead of spending their employer's money or their government's money. And by that I mean give the money that the government and employers are spending on their behalf to the individual patient. They will make much smarter decisions with their own money than they are currently making with the federal government's money or their employer's money.

That will put downward pressure on prices and make health care more affordable for everyone. The next thing you need to do is you need to eliminate a lot of the barriers to competition that government has put in place in our health care sector, often at the behest of incumbent interests in the health care sector, like hospitals and drug companies, so that innovators and entrepreneurs can find lower cost ways of providing better health care to people. That, again, will bring down the cost of health care and bring health care within the reach of people who could not afford it yesterday.

That's how markets work in every other sector of the economy, and although health care is special, it's not so special that markets don't do that right now. Markets do reduce the cost of care where they're given room to breathe.

MARTIN: Michael Cannon is the director of health policy studies at the Cato Institute. He was kind enough to join us once again in our Washington, D.C. studios. Michael Cannon, thanks so much for coming back.

CANNON: Any time.

MARTIN: Please tune in tomorrow. We will continue our conversation about the upcoming Supreme Court arguments on the health care law by talking to Neal Katyal. He's former acting solicitor general. He has defended the Affordable Care Act in a lower court. Transcript provided by NPR, Copyright NPR.